Corporate governance after the banking crisis

Abstract

It is an ill wind that blows no one any good, and a good thing that will, hopefully, emerge from the otherwise ill wind of the 2007–08 financial crisis is a reform of corporate governance. Some reforms will be forced on companies by tougher regulation, particularly in the financial services sector, with which they will be obliged to comply. But there are internal pressures for reform too. Corporate executives have a duty to their shareholders to minimize the risk of a recurrence of the wealth-destroying storms that swept through the world’s capital markets at the end of the 2000s, the effects of which are still being felt in the early 2010s.